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GRAND RAPIDS — Earlier this year, insurance firm MetLife decided to drum up a little cash. In the grips of one of the hottest real estate markets in history, the company decided to sell off some of its midtown Manhattan property. MetLife sold two buildings — including its landmark headquarters — and netted more than $2 billion.

So where did the firm move its offices? Nowhere. MetLife is leasing back the space it formerly owned. The only moving that took place was of deeds and dollars. Even the crowning MetLife signs stayed put atop the 58-story skyscraper.

MetLife is not alone. Companies such as General Motors, Citibank, Credit Suisse First Boston and Verizon have been unloading their pricey office space and signing long-term leases with the new owners. Part of these companies' rationale is clear: A firm can free up millions (or billions) of dollars in cash by selling its real estate. But in the face of skyrocketing Manhattan real estate values — and recognizing a potential bubble-burst effect — some firms are cashing out before these record prices begin to drop.

But is what's true in Manhattan true in Grand Rapids? It depends.

Stan Wisinski of commercial real estate firm S.J.Wisinski & Co. doesn't believe that businesses in West Michigan should sell off their real estate holdings unless they need to free up cash. The economic factors that are pushing up real estate values in places like California, New York and Florida have not come home to roost in West Michigan. Just the opposite, Wisinski said. The struggling local economy suggests commercial real estate values may not skyrocket, but they should continue to grow steadily.

In general terms, Wisinski said that companies are better off owning than leasing. If a business that owns its headquarters is in need of cash, Wisinski said, it might be better served to offer its equity in the property as collateral for a loan, as opposed to actually selling.

That said, Wisinski believes that the buy-sell-or-hold question needs to be dealt with on a case-by-case basis.

"It's like if 10 people go to a doctor, you're going to come out with 10 different prescriptions or 10 different diagnoses, and basically that's the same in real estate," he said. "It just depends on the company's situation. If they have a lot of cash and cash is not a problem, then, hey, they're probably better off owning."

But sometimes a company can do itself a disservice by holding on to real estate, according to Jack Buchanan, CEO of development firm Blue Bridge Ventures LLC.

Buchanan argues that most businesses would see a higher rate of return on their investment by cashing out of their real estate holdings and reinvesting the proceeds in the business.

"A lot of these companies have typically thought, 'Oh, we want to own our headquarters' or 'We want to own our real estate.' Well, now you've got to look at it and say, 'Why?' The reality is, it goes back to the rate of return on their investment. They just don't get it on their real estate," he said. "So that's where we're seeing a driver, with those entities saying, 'You know, this is kind of crazy for us to hang on to the real estate, because we could make more money with that money in our own business.'"

Buchanan also said that business owners tend to value their real estate based on its current use, whereas a developer might value the land based upon potential use. He said that many times companies don't consider the occupancy costs of staying in their current real estate.

"They ignore that, which is a mistake," he said. "They usually ignore — and never go out to try to find out — what is that real estate worth to someone else? And that's another big mistake. There are a lot of companies that say, 'My company's worth X.' But what they fail to realize is that their real estate could be worth a fortune to somebody else, and they'd be far better off moving somewhere else — even though their real estate is paid for, free and clear. That doesn't matter. It's an opportunity cost."

That opportunity cost entails not only the potential value of the property, but also the fact that a company's current home may be ill suited for its needs. Whether it's through improvements in location, energy efficiency or technology, Buchanan said many businesses find that moving into a new facility can save them a great deal of money.

Buchanan recommends businesses tap the expertise of an appraiser, broker or developer every few years to evaluate their real estate holdings. Blue Bridge has discovered "somewhat of a cottage industry" in working with businesses to envision future uses (and values) for their real estate.

"We're going around to companies and just saying, 'You realize how much money you're just burning by not looking at: a) the waste in (staying in) this real estate, and b) the potential of this real estate. And if you take those things into account — whether you want to own again somewhere else or lease somewhere else — you don't want to stay in this building, for sure.'"

Blue Bridge Ventures, incidentally, leases space in the Brassworks Building on Monroe Avenue NW — a building the company formerly owned.

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